Oil market to shrug off Qatar’s OPEC exit

Oil markets are expected to shrug off Qatar’s departure from OPEC, according to analysts.

Doha said it would leave OPEC from Jan. 1, 2019 in what is seen as a largely symbolic move.

Qatar has been under a trade embargo imposed by a Saudi Arabia-led group of Arab states since last June, following accusations that the country was fueling regional instability and funding terrorism.

“Qatar’s decision to exit OPEC will have no major impact on the cartel’s decision-making process, oil output or oil prices in the short term,” said Abhishek Kumar, an energy analyst at Interfax Energy in London.

“Qatar is one of OPEC’s smallest oil producers, and its upstream strategy has revolved around natural gas production,” he said.

Qatar produces about 600,000 barrels of crude oil per day which compares with the near 10 million barrels a day produced by Saudi Arabia, according to data from 2017. Qatar is the 11th-largest producer out of 15 members in OPEC and accounts for less than 2 percent of the oil group’s output.

“The move is highly symbolic. Qatar has been a member of OPEC since 1961 but we doubt that it will have a major bearing on global energy markets,” read a note from Jason Tuvey, senior emerging markets economist at Economics on Monday.

Rejecting suggestions the decision was politically motivated, Qatar’s energy ministry said on Monday it wanted to focus more on gas production.

“In the next few months we will be announcing several major projects. Our goal in this strategy was to remain focused on our core business & activities,” the Energy Ministry said.

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